Electric-vehicle battery (EVBs) manufacturers in China are expanding production capacity to tap surging demand from electric vehicle companies, sparking worries over excess capacity. Experts are calling for a more steady expansion of production capacity, better utilization of EVBs, stepped-up efforts in developing high-quality batteries, and technical upgrades. Major types of EVBs include lithium-ion batteries, lead-acid batteries, nickel metal hydride batteries and sodium nickel batteries. Such batteries are usually rechargeable and designed to have a long-endurance capacity. On August 12, leading battery maker Contemporary Amperex Technology Co (CATL), disclosed a plan to raise CNY58.2 billion for projects related to lithium batteries and research and development in new energy technologies. Eve Energy Co signed an agreement on August 2 with the management committee of the Jingmen High-Tech Industrial Development Zone in Hubei province, to set up a lithium-iron phosphate battery project with an annual output of 15 gigawatt-hours and a ternary lithium battery project with an annual output of 15 Gwh. In July, battery maker Gotion High-Tech also announced it will cooperate with Volkswagen Group to build up an industrial chain covering raw materials, battery production and product recycling. Later, the company said it would establish a cathode material project with an annual output of 200,000 metric tons in Lujiang county, Anhui province.
Many companies are expanding footprints in the sector. According to the China Electric-Vehicle Battery Industry Innovation Alliance, in the first half, EVB production in China reached 74.7 GWh, up 217.5% year-on-year. Total capacity of EVBs sold during the period amounted to 58.2 GWh, a rise of 173.6% year-on-year, and installed capacity was 52.5 GWh, up 200.3% year-on-year. The surge in sales of new energy vehicles (NEVs), mainly electric vehicles (EVs), is an important reason why battery makers increased their production. Zeng Yuqun, Chairman of CATL, said that the company had seen an increase in orders. Staff from Ganfeng Lithium also told the newspaper that growing demand of EVBs from EV makers has triggered interest and participation of upstream companies, and thus led to an increase in EVB supply. The China Association of Automobile Manufacturers (CAAM) said production and sales of NEVs in the first half reached about 1.22 million and 1.21 million units, respectively, both increasing about 200% year-on-year.
Experts said the development of NEVs and EVBs will enter a fast track as China pursues the goal of peaking carbon emissions by 2030 and reaching carbon neutrality by 2060. The EVB industry should keep an eye on production to avoid excess capacity in the market. It is also important to improve the utilization rate of EVBs and develop high-quality products. Meanwhile, EVB manufacturers can step up efforts to develop products like hydrogen batteries and sodium-ion batteries, to meet the growing need for a technical upgrade. “The utilization rate of EVBs is still relatively low,” said Lin Boqiang, Director of the China Institute for Studies in Energy Policy at Xiamen University. Among EVBs produced in the first half of this year, totaling 74.7 GWh in production capacity, about 30% were not used, but EVBs produced by leading manufacturers had relatively high utilization rates.
